Good day, and welcome to the Transocean Q1 2014 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Thad Vayda. Please go ahead, sir.

Thank you, Travis. Good day, and welcome to Transocean’s first quarter 2014 earnings conference call. A copy of the press release covering our financial results, along with supporting statements and schedules, are posted on the company’s website at www.deepwater.com. We’ve also posted supplemental materials that you may find helpful as you update your financial models. These materials can be found on the company’s website by selecting Financial Reports under the Investor Relations tab. Joining me this morning’s call are Steven Newman, Chief Executive Officer; Esa Ikaheimonen, Executive Vice President and Chief Financial Officer; and Terry Bonno, Senior Vice President of Marketing. Before I turn the call over to Steven, I’d like to point out that during the course of this call participants may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts. Among others, these include future financial performance, operating results, estimated contingencies associated with the Macondo well incident, anticipated results of our cost savings initiatives, strategic projects and corporate financing activities, capital allocation and strategy, new build projects and the prospects for the contract drilling business generally. Such statements are based on the current expectations and certain assumptions of management and are therefore subject to certain risks and uncertainties. As you know, it’s inherently difficult to make projections or other forward-looking statements in a cyclical industry, since the risks, assumptions and uncertainties involved in these forward-looking statements include the level of crude oil and natural gas prices, rig demand, the effects and results of litigation, assessments and contingencies, and operational and other risks, which are described in the company’s most recent Form 10-K and other filings with the U.S. Securities and Exchange Commission. Should one or more of these risks and uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those indicated. Transocean neither intends to nor assumes any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated. Also note that we may use various numerical measures on the call today that are or may be considered non-GAAP financial measures under Regulation G. You’ll find the required supplemental financial disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation, on our website at www.deepwater.com under Investor Relations, Financial Reports and Non-GAAP Financial Measures. Finally, to give more people an opportunity to participate in this call, please limit your questions to one initial question and one follow-up question. Thank you very much and I’ll now turn the call over to Steven Newman. Steven?

Thanks, Thad, and welcome to all of our employees, customers, investors and analysts. Thank you for joining us on the call today. As you saw from our first quarter press release last night, we reported net income attributable to controlling interest of $456 million or $1.25 per diluted share. After adjusting for net unfavorable items of $64 million, we delivered adjusted earnings from continuing operations of $520 million or $1.43 per diluted share. Our revenue efficiency for the first quarter was 95.7%, the highest we’ve achieved since early 2008. Ultra-deepwater revenue efficiency was 96.4% in the first quarter compared with 90% in the fourth quarter of 2013. The central factor contributing to these strong results was reduced downtime related to well control equipment. During the period, about 44% of total downtime was due to unplanned maintenance of the BOP and associated control systems compared with approximately 64% and 60% in the fourth and third quarters of 2013 respectively. While April’s revenue efficiency was also generally in line with those achieved during the first quarter, I reiterate my usual caution that our progress will not necessarily be linear. However, I am very pleased and encouraged with the results our operations teams delivered in the first quarter, and I thank them for their tireless efforts. In addition to strong revenue performance, our first quarter results also reflected lower out-of-service days and progress on our ongoing cost control efforts across the company. Esa will provide a bit more color on these items when he reviews the numbers in a moment. Recognizing that we are currently in a challenging business environment, I think that it is useful to reflect on Transocean’s strategy in the context of our long-term view of the offshore drilling market. We remain very bullish on the long-term fundamentals available to…

Thank you, Steven. And good morning and good afternoon to everyone on the call. As an opening remark, I belief that our first quarter results very clearly demonstrate our commitment as well as our ability to improve those things that are within our control and to deliver a strong performance even in the context of a challenging market. As I normally do, I will discuss the key elements of our results and then comment on our 2014 guidance as necessary. All results included in the comparison periods have been restated for the sale of ADTI that was completed in January. As Steven already mentioned for the first quarter of 2014, we reported net income attributable to controlling interest of $456 million or $1.25 per diluted share. These results included $64 million or $0.18 per share in net unfavorable items that are detailed in our press release. Excluding these items are adjusted earnings from continuing operations with $520 million or $1.43 per diluted share. This compares with similarly adjusted earnings of $0.71 per diluted share in the fourth quarter of 2013. Consolidated revenues from continuing operations were $2.34 billion, $87 million increase relative to the fourth quarter. This increase was primarily due to two reasons namely an increase in revenue efficiency to a very encouraging 95.7% from 91.7%. It added about $100 million to revenue sequentially. And an increase in fleet utilization to 78% from 75% which added about $70 million to revenues. This was mainly the result of decrease in planned [ph] shipyards. About half of this total increase was offset by the combination of idle time on the Sedco Energy and the Transocean Marianas and fewer days available to operate during the quarter when compared with the prior period. First quarter operating and maintenance expenses were $1.27 billion, about…

Thanks, Esa, and good day to everyone. Before we cover specific markets, I would like to make a few general comments. Year-to-date, we generated $800 million of contract backlog including securing contracts for the GSF Development Driller II, the Paul B. Loyd, Transocean Marianas and Constellation II. Importantly, we are returning the Marianas to active status in the South African market. We’re entering the Black Sea market with a versatile ultra-deepwater semi and extending our harsh environment presence west of Shetland. The majority of this backlog was successfully executed within the last 40 days and then it is the result of the intensive work of Transocean’s marketing and global support teams. And I commend them all for their efforts. Although overall pace of tendering remains slow in the first quarter, we are seeing a few opportunities, all of which were anticipated finally coming to the market. The outlook for 2014 and 2015 remains challenging with respect to oversupply of ultra-deepwater. However, it is encouraging to see some life in the Golden Triangle with a few expected awards in West Africa, Brazil and the U.S. Gulf of Mexico. Floater opportunities are now pushing into 2015 and ‘16 while customers are competing with us via form outs for the one off well opportunities with their available rigs. We also continue to see weak deepwater and midwater markets and as in previous oversupply cycles, the most capable rigs will compete down potentially displacing lower specification units. While we believe that the floater market will continue to be difficult through 2015, we expect year-on-year customer demand to continue to grow assuming healthy relatively stable oil and natural gas prices. The jack up market remains steady with new supply coming to the market currently being absorbed. Rates in utilization remain healthy and tendering activity is…

Thanks, Terry. Travis, with that, we’re ready to open it up for Q&A.

(Operator instructions) We’ll take our first question today from Ian MacPherson with Simmons. Ian MacPherson – Simmons & Company Intl: Hey. Thank you and congratulations on the good quarter. Terry, the DD2 going to the Black Sea, that’s a fairly lengthy mob, but I believe one that typically involves some effort with regard to breaking down and rebuilding the derrick on the way through the straits. Does that day rate reflect a considerable amount of CapEx in mobilization or is that 360 what we would call a clean day rate?

Well, normally, we don’t need to break down our mobilizations. So I would just say the $360,000 a day is the operating rate. Ian MacPherson – Simmons & Company Intl: Okay.

And we have in the past, we’ve done lump sum mobs, we’ve done per day mobs. So I think that that’s really all that we need to describe on this particular transaction. Ian MacPherson – Simmons & Company Intl: Okay. My follow up question regarding Caledonia and the asset strategy, Steven, really with regard to non-core asset sales, the Transocean historically has been a consolidator in the industry and some companies are averse to building stacked rigs. And recently, the market fundamentals have had itself and you’ve embraced speculative new builds and deconsolidation which in a way is sort of counterintuitive. But I think that you could say if you get very good price realizations on non-core asset sales, they’re always good, right? The shelf drilling sale seems like it was pretty one sided with regard to being favorable to the buyer. And I think the concern going forward would be how do we extract great shareholder value for Caledonia or whatever, non-core floaters are coming down the pipe. What sort of assurance do you have that you’re going to get accretive separations from these non-core assets going forward?

So there’s two things I want the market to remember when we talk about the actions we’re taking. And one is strategy and the other is value. So our asset strategy, I think we’ve been pretty clear. Our desire is to reduce the company’s exposure to low spec, commoditize assets, and increase our exposure to high spec differentiated assets. And I think with what’s going on in the market right now, I think that strategy should be easily understood in terms of the rationale underpinning the strategy. The execution of the strategy, I think, as I said in my prepared comments, I think we were very opportunistic in agreeing to build the two floaters in Jurong earlier this year. We’ve got excellent capital costs and very favorable commercial terms and deliveries in 2017 and 2018 which is a favorable time period with respect to the long term fundamentals of this business. The decision to disclose our intent regarding Caledonia is part and parcel of that strategy. And that’s where you have to remember the company’s objective regarding valuations. We know the assets in our fleet better than anybody else. We know what it cost to operate them, we know the amount of capital required to keep them running. And so the starting point with respect to any transaction, whatever form the transaction might take, the starting point is what’s the asset worth to us. And if we can find somebody who’s willing to pay us more than the asset is worth to us, that’s an easy deal to do, and that’s clearly accretive to shareholder value. And so that will be the objective or the lens through which we view any potential transaction regarding Caledonia. What are those rigs to us? If we can’t find somebody who’s willing to pay us what we think those rigs are worth, then we’ll continue to operate them. Ian MacPherson – Simmons & Company Intl: Very good. Good answer, thanks.

Our next question comes from David Smith with Heikkinen Energy Advisors. David Smith – Heikkinen Energy Advisors: Hi, good morning. Thank you.

Good morning, David. David Smith – Heikkinen Energy Advisors: I’m curious about the cost breakdown provided for the ultra-deepwater fleet, particularly the idle cost per day which was about 25% of the in-service cost. So on those 145 days of idle time, how did you get so much cost relief compared to the in-service costs, and is this the cost level we should expect for the ultra-deepwater idle costs going forward?

Yes, it’s Esa Ikaheimonen here. Recognizing the name of the company you represent, there might be some connection there to my Finnishness but let’s leave that aside. The cost associated to idle time vary a lot and it is very difficult to give you a very comprehensive answer on that right now and right here. We really need to discuss in a lot more detail as to what drives those costs and so on. Generally speaking, when we talk about our CPR activity and costs associated to that which is the out-of-service cost, really depends on the nature of CPR and almost every single one of those are a little bit different. And the split between what we capitalize and what we expense may vary very considerably. I know this is not the answer that you expected. I think if I were you, I would look at a little bit longer term averages in terms of how the out-of-service cost have evolved rather than a snapshot that has to do with a single quarter. And that gives you a better sort of modeling certainty in terms of how things tend to be on a more average basis. I think further than that, I would really suggest that maybe we can have a separate discussion on some of the more specific questions that you may have. But that’s what I would say at this moment in time. David Smith – Heikkinen Energy Advisors: Absolutely. I appreciate it. I guess I would note that on the idle cost for the ultra-deepwater fleet, looking longer term, in the last couple years, you haven’t had a whole lot of idle days. So separate from the out-of-service costs and looking at – listening to Terry’s commentary about more idle time between contracts, it was just a point I was hoping to understand about when a rig has lost contract between jobs, are you able to get significant cost relief during the idle time? Because the –

Yes, I probably little bit actually answered a different question. Same apply though because there’s different types of idleness. In between contracts it’s very difficult actually to immediately reduce the cost base because almost by definition, you’re getting ready to continue drilling as soon as Terry’s team has got the rig on a new contract and therefore given the fact that the cost base is pretty fixed actually, there isn’t an awful lot of change. Then when you warm stack the rig, there’s a step change in terms of what you need in order to keep the rig warm and ready with moderate incremental activity to drill as when the contract comes and then the cold stacked rig is a completely different story again. So you really have three different types of situations and you got to look at these things on a rig by rig basis to understand what the numbers tell you. David Smith – Heikkinen Energy Advisors: Sure.

But general rule is that idle in between contract and the OpEx level is not widely dissimilar to an operating rig. David Smith – Heikkinen Energy Advisors: Okay.

The longer it’s actually released, the more encouraged and incentivized you are obviously to look at ways to reduce manning and lay off people and do that on a temporary basis. David Smith – Heikkinen Energy Advisors: Well, I’m guessing you planned on cold stacking the ultra-deepwater rigs but I’ll follow up offline for the rest and I’ll finish with that. Thank you.

(Operator instructions) We’ll take our next question from Harry Mateer with Barclays. Harry Mateer – Barclays Investment Bank: Hi, guys. Just a question, can you just talk a little bit about how the recent announcement of the potential separation of Caledonia fits into your balance sheet priorities? There is a good bit of EBITDA from those assets at least at this point, so how do you plan to manage rig debt as those assets move into a separate vehicle?

Harry, it’s a good question. And it’s good to get questions every once in a while from the debt side of things as well. Thanks for that. You know our balance sheet philosophy and you know the importance of the investment grade rating to us, so that’s one of our capital allocation priorities and I think we’ve demonstrated that we really mean that. And it just fits perfectly into cyclical and capital in terms of industry and all that. And you’ve heard that story. And as long as Caledonia is part of our consolidated group and our consolidated balance sheet, nothing changes. So we do intend to manage obviously Caledonia in line with the rest of the business at a consolidated level. The moment it becomes more independent than that, then we do consolidate and then so on and so forth. Of course, again, we have to recognize the fact that we also stopped consolidating the earnings associated with that business and therefore there is a necessity to use a significant part of the proceeds to reduce our overall indebtedness. So, again, in order to manage the leverage and in order to manage the leverage in line with our overall balance sheet philosophy and policy. So it won’t change anything. We will have to manage that on a Transocean side before and after independence and before and after potential detail consolidation as we’ve done it so far. And that includes compensation for the reduced earnings in order to manage the leverage ratio at a level that is comfortably within our range and that is required in order for us to sustain our investment grade rating. Harry Mateer – Barclays Investment Bank: Okay, thanks for that answer. And then my follow-up question, I guess more for Terry. But can you just comment a little bit, there’s really been a lot of speculation certainly out there about where rig day rates could bond. Can you give us a sense for new build ultra-deepwater rates, I mean some numbers that have been banding about [ph] out there just some speculation for the lows like $400,000 a day, give us a sense for whether that’s something that’s even possible or where do you think the bottom could be?

Hi, Harry. Right now, it’s really difficult to say. There’s a lot of bids there in the process that everyone’s competing for and I’d say the last couple ones that have come out, we all know that about 18 to 20 ultra-deepwater rigs have actually been bid at those programs. So you can see that the competition is pretty fierce. I think that it becomes a real challenge for our competitors when new builds that were built on spec during this particular near term softness, I think we have the luxury of having all of ours with back to back contracts that are being delivered during this timeframe. But I think for them to think about how could they reduce the rates to not return the type of economics that they had certainly planned, I think it’s going to be a challenge. I know that one of our competitors recently said that they did not go to $400,000 a day, but I think with the competitions, they’re going to have to make those decisions or look at what the alternatives are. But as far as trying to tell you where our bottom is, again, we’re in these competitive situations right now and if we start talking about where we think rates will go, then I’m afraid that we’d tipping our hand on the type of things that we’re looking at. But it’s a really good question. Harry Mateer – Barclays Investment Bank: Thanks, I appreciate it.

(Operator instructions) We’ll take our next question from Lucas Doll [ph] with ABG. Lucas Doll [ph] – ABG: Thank you. Two quick questions. Hi guys. First one was the – Terry, I didn’t catch the length of the contract on the DD2. Could you repeat that?

It’s almost a year’s worth of work. Lucas Doll [ph] – ABG: Almost a year, okay.

Yes, it’s almost a year. Lucas Doll [ph] – ABG: And then the second one, on the work that you are targeting right now and you’re obviously competing with some of the new builds, do you see a lot of tenders where fifth generation rigs are being excluded by the technical nature of those tenders or is that the rarity?

Well, I think that you’re going to see perhaps a little bit more of that in the Gulf of Mexico than you probably see outside of that environment. So they’re drilling the more challenging deeper wells and they’re needing more hook load capacity. The fifth generation typically don’t have 2.5 million hook loads. So that’s the type of situation. That’s why that we’re looking to relocate some of those fifth generation rigs. And having said that, though, there are still opportunities in the Gulf of Mexico that they can drill. But as far as some of the recent tenders, I think there’s one that is it’s either in the market, about to come to market, that will ask for this 2.5 million hook load. But again, we are actively in discussions on our fifth generation fleet and we do have them in some of the current tenders. Lucas Doll [ph] – ABG: Okay. And while we are looking for the bottom and awaiting for things to trough, wouldn’t you think what needs to happen to sort of find the inflection point, is that somebody signing on a bunch of rigs or a chunk of rigs being cold stacked? Would you say it could be the turning point in terms of the supply-demand balance and how it evolves?

Luke, I think that it’s pretty easy to look to Africa for the amount of demand that’s been out there for quite some time. If we see those opportunities closing sooner, I think that takes some pressure off. I mean there’s what, 15 to 20 opportunities there alone. And they’re real opportunities. So it’s not just possibilities. So I think that that really helps the situation a lot. We hope that Petrobras will come to the market for more tenders. And by the way, we think they will. So that will help. And certainly, for some of the older fleet, everyone since I’ve been in the industry in the early ‘80s, always talked about one day that we will stack these older rigs. But we’re not seeing a lot of that at this moment. But certainly, attrition will help to the situation too. Lucas Doll [ph] – ABG: Okay, great, thank you.

It appears there are no further questions in the queue. At this time, I’d like to turn the conference back to management for any additional or closing remarks.

Thank you all very much for your participation at today’s call. And if you have any follow up questions, feel free to give us a call this afternoon. We’ll be available. I look forward to chatting with you again when we report our second quarter 2014 earnings. Have a good day.

That concludes today’s presentation. Thank you for your participation.